At the beginning of last year, Tony's Auto Dealership had

The correct answer to this question is (E).

In evaluating statement (1) alone, we are able to calculate the total cost of cars that Tony’s acquired last year, but we do not know how many and which cars Tony’s sold last year, so we don’t know how many or which cars remain on the lot at the end of the year: as such, statement (1) alone is not sufficient.

In evaluating statement (2) alone, we know Tony's total revenue from last year. But we do not know which cars Tony's sold and, accordingly, the acquisition cost of such cars, and we do not know the cost of the cars which Tony's acquired last year. As such, statement (2) alone is not sufficient.

When evaluating statements (1) and (2) together, we know Tony’s total revenue last year and can calculate the total cost of the cars Tony's acquired last year. But we still do not know which cars Tony's sold last year and, accordingly, cannot calculate the acquisition cost of such cars. Therefore, we are unable to determine the acquisition cost of the cars remaining on the lot to be sold at the end of the year. Statements (1) and (2) together are not sufficient to answer the question, and the correct response is E.